Developers want red tape reduced

Building a new apartment building can take 10 years. The construction itself from groundbreaking to inspection takes two years. Most of the time is taken up by preparations where the developer must obtain dozens of permits. Critics say this is leading to a shortage of flats and driving up prices.

David Jirušek, a spokesman for Finep, told daily Hospodářské noviny (HN) that in Denmark, for example the process was much simpler and had only five steps, compared to 33 in the Czech Republic.

Leoš Anderle, CEO of Sekyra Group told the daily people were now moving into homes that began preparations eight years ago.

Developers have long complained of the red tape involved in building new flats, claiming that it not only drives up prices but by the time new flats reach the market the designs are already dated.

Developers say the ideal time for preparation and construction should last about four years. An amendment to the Building Act is now in the Chamber of Deputies, the lower house of Parliament. “If it passes, flats will actually show up on the market after three years,” Anderle told HN.

Prague Institute of Planning and Development (IPR) spokesman Marek Vácha said that by 2030 there would be a demand for 82,400 flats with a combined area of 5.1 million square meters. This comes to 5,500 new flats per year.

However, the current supply from developers in Prague is much smaller. At the end of this year's first quarter, a joint analysis from developers Trigema, Skanska Reality and the Central Group showed a total of 3,450 available apartments. The figure was twice as high two years ago.

According to data from developers in Prague, about 84,000 apartments are now in the process of being developed.

Radek Ježdík of Central Group, the largest residential developer in Prague, told HN that in five years they expected to reach a maximum of 24,000 flats. Most new flats will be built in Karlín, Žižkov, Modřany, Smíchov, Libeň, Hostivař, Vysočany, Uhříněves, Stodůlky and Hlubočepy, he added.